FTSE just shy of 7,000 as strong trading updates drive market surge

Market report

The mood change in London’s leading markets gathered pace on Wednesday as strong performances by retail, airline and engineering stocks boosted the FTSE. A fresh wave of better-than-expected company updates helped replace caution over rising Delta variant cases with optimism over increased consumer spending.

The FTSE 100 made great strides to lift over 7,000 again for a brief spell, but cooled before the close.

London’s top flight closed 117.15 points, or 1.7 per cent, higher at 6,998.28 on Wednesday.

Chris Beauchamp, chief market analyst at IG, said: “Tuesday’s rally has extended into a second day, and Monday’s sudden drop looks more and more like a sudden air pocket that produced excitement but little lasting impact.

“Global rebound’ certainly appears to be the theme among the leaders on the FTSE 100, as the market’s outlook swings back to optimism from Monday’s pessimism.

“Rolls-royce, IAG and Compass Group are all good names to pick for those looking for a renewed economic recovery, while retail landlords like Land Securities and British Land should see further inflows if more retailers post updates like the one from Next this morning.”

Europe’s other major markets followed suit and bounced back after a few tough sessions to boast strong gains.

The German Dax increased by 1.36 per cent and the French Cac moved 1.85 per cent higher. Across the Atlantic, the Dow Jones fed off European optimism to make further gains in the early session, having already wiped Monday’s losses in the previous trading day.

Meanwhile, sterling delivered a resilient performance after tumbling to a five-month low on Tuesday, with negative noises surrounding the Northern Ireland Protocol starting to become background noise. The pound was up 0.15 per cent versus the US dollar at 1.369 and was 0.1 per cent higher against the euro at 1.160.

The price of oil started on a recovery move after hitting a two-month low on Tuesday in the face of a surprise rise in US inventories. Brent crude rose by 3.88 per cent to 72.04 dollars per barrel.

The biggest risers on the FTSE 100 were Rollsroyce, up 6.98p to 97p, Next, up 552p to 7,946p, Whitbread, up 173p to 3,012p, Compass Group, up 79.5p to 1,492p, and IAG, up 8.96p to 169.42p.

The biggest fallers on the FTSE 100 were Royal Mail, down 14.4p to 516.2p, United Utilities, down 29.5p to 1,538.5p, Avats, down 8.6p to 581.4p, Hikma, down 23p to 2,603p, and Fresnillo, down 6.4p to 762.6p.

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